Oil sands production growth will continue through the next decade, but a slowdown is anticipated with investment to remain lower than historical levels, according to a new major research initiative by IHS Markit.
Titled "Scenarios for Future Growth," the Oil Sands Dialogue report forecasts the outlook for oil sands investment and production growth across different price outlooks in the IHS Markit global energy scenarios.
Upstream investment in new oil sands production capacity has fallen by twothirds since the 2014 collapse of oil prices -- from more than $30 billion to just over $10 billion estimated for 2017 -- and may fall further in 2018 before beginning to recover. Yet oil sands production is still expected to grow in each of the IHS Markit scenarios.
In 2017, Canadian oil sands production is expected to have topped 2.6 million barrels per day (mbd). Depending on the IHS Markit scenario and corresponding global oil price trajectory, oil sands production could rise between 700,000 bpd and 1.4 mbd by 2030 -- with nearly 400,000 bpd of growth in all cases coming from projects in construction today or projects recently completed and ramping up.
Although costs have fallen significantly in the oil sands and more oil will come for less, it is the unique nature of oil sands production that makes a future without oil sands growth difficult to envision over the coming decade. The report cites the lack of production declines, which is unique compared to other types of oil production globally.
While the collapse of oil prices has slowed investment, projects under development at the onset continue to be completed and production growth has continued. However, the reduced investment will impact the rate of future growth, the report says. In all IHS Markit scenarios, the level and pace of future investment and growth in the oil sands is lower compared to the decade preceding the oil price collapse.
For more information, visit www. ihs.com/oilsandsdialogue.
